Receptor protein tyrosine phosphatases (RPTPs) have important functions in nervous system development and are implicated in metabolic regulation and carcinogenesis. However, many questions remain regarding their regulation by extracellular ligands and their downstream signaling mechanisms. The fruit fly Drosophila offers an attractive model system in which to address the mechanisms of RPTP function in vivo. LAR and PTP69D, the two Drosophila members of the type IIa family of RPTPs, are required for R7 photoreceptors to select the correct synaptic target layer, and for larval motor neurons to form synapses of the correct size on their target muscles. Mutation of either RPTP produces a strong and quantifiable phenotype. However, R7 photoreceptors and larval motor neurons differ significantly in their requirements for specific structural features of LAR. This proposal will investigate how the novel signaling mechanism used by LAR to direct R7 targeting differs from its mode of action in motor neuron synapse growth and from PTP69D signaling. The phosphatase activity of some RPTPs is negatively regulated by dimerization. Preliminary data shows that R7 target selection does not require the phosphatase activity of LAR, but does require a domain that mediates LAR dimerization. The first aim of this proposal will examine whether PTP69D also has two distinct signaling mechanisms, and whether it is interchangeable with LAR in motor neurons. It will also study the effect of forced dimerization on LAR function and develop a method to visualize LAR dimerization in vivo. In addition, the importance of PTP69D homodimerization or heterodimerization with LAR will be investigated. RPTPs have been shown to regulate both cell-cell and cell-matrix adhesion. In the second aim of this proposal, molecules implicated in each of these functions will be tested for genetic and physical interactions with LAR to determine whether the phosphatase-independent function of LAR in R7 photoreceptors uses one of these mechanisms. In addition, both genetic and biochemical methods will be used in unbiased screens for potentially novel molecules that require the dimerization domain to interact with LAR and might therefore act downstream of LAR in R7. The ligands that control LAR activity in motor neurons do not regulate it in R7. The final aim of this proposal is to screen transmembrane and secreted proteins for an effect on R7 targeting, in order to identify candidate ligands for LAR or PTP69D expressed by the target neurons. These candidates will then be tested for their ability to bind to and regulate the function of both RPTPs. Taken together, the experiments in this proposal will characterize a non-canonical mechanism of RPTP function, and may identify new ligands and downstream effectors for this important but poorly understood class of receptors.